Discover the essential steps and considerations for purchasing your dream home in Canada. This guide covers financial planning, government programs, and key decisions in the home buying process.
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by Tony Slavin
Is Homeownership Right for You?
Exciting but Not for Everyone
Consider all costs before deciding to buy a home.
Monthly Housing Costs
Should not exceed 39% of your gross monthly income.
Total Debt Load
Should be less than 44% of your gross monthly income.
Saving for Your Home
1
Set a Down Payment Goal
Determine how much you need to save.
2
Budget for Savings
Make saving a part of your regular budget.
3
Automate Transfers
Set up automatic transfers to a savings account.
4
Choose Short-Term Investments
Consider savings accounts, GICs, or low-risk mutual funds.
Tax-Advantaged Savings Options
Tax-Free Savings Account (TFSA)
Save or invest tax-free. Withdrawals are not taxed. Can be used for home purchase.
Registered Retirement Savings Plan (RRSP)
Save for retirement tax-free. Can also be used for home purchase through the Home Buyers' Plan.
Government Home Buying Programs
Home Buyers' Amount
Non-refundable tax credit up to $1,500.
GST/HST Rebates
Potential rebate on tax paid when buying a home.
Home Buyers' Plan
Withdraw up to $60,000 from RRSP tax-free (after April 16, 2024).
First Home Savings Account (FHSA)
Tax-Free Savings
Save up to $40,000 tax-free for your first home.
Annual Limit
Contribute up to $8,000 per year.
Flexible Option
Specifically designed for first-time homebuyers.
Getting Preapproved for a Mortgage
1
Research Lenders
Compare mortgage options from different financial institutions.
2
Gather Documents
Prepare financial statements, employment verification, and credit history.
3
Apply for Preapproval
Submit your application to determine your qualifying amount.
4
Start House Hunting
Begin searching for homes within your preapproved budget.
Finding Your Home
1
2
3
4
1
Research
Use websites, apps, and online resources.
2
Realtor Assistance
Optional but can help with search and negotiations.
3
Visit Properties
Attend open houses and schedule viewings.
4
Make an Offer
Submit an offer on your chosen home.
Understanding Mortgage Basics
1
2
3
4
1
Prepare for a Mortgage
Understand the process and requirements.
2
Shop Around
Compare different mortgage options and features.
3
Choose the Right Mortgage
Select a mortgage that fits your needs and budget.
4
Understand the Terms
Know your rights and responsibilities as a borrower.
Additional Home Buying Costs
1.5-4%
Closing Costs
Percentage of home's purchase price for upfront fees.